The Bill to “prohibit the wearing or public display, by a person not entitled to do so, of medals or insignia awarded for valour, with the intent to deceive" will get its second parliamentary reading in November.

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Under the 2006 Fraud Act it is only illegal to pretend to have won medals for financial benefit, with a maximum punishment of 10 years in prison, the MoD says.

Gareth Johnson MP, who is sponsoring the Bill, said: “At the moment you and I could walk down Whitehall with Victoria Crosses on our chests and try to chat up girls or curry favour and there’s no offence whatsoever.

“I am president of my local Royal British Legion and we have had a couple of these Walter Mitty characters join and pretend that they have been awarded medals.

“It makes you angry in so many ways. Not only do you have circumstances where people are trying to curry favour and admiration, but it also takes away from people who have genuinely and legitimately earned it.

He said some imposters had taken part in remembrance parades.

He said the culprits ranged from "people who have genuine mental health problems to people who are just sad and people who are quite manipulative and trying to deceive".

“We are not looking at a huge number of people being arrested, but I think it’s right that the police have the ability to act."

The proposed new Awards for Valour (Protection) legislation would have an exemption for actors and military re-enactment.

America created a Stolen Valour Act in 2005, but it was later ruled unconstitutional by the US Supreme Court who said it infringed freedom of expression. New legislation was then passed targeting only those who lie to gain money, property or other tangible benefits.